GlobeNewswire Inc | Dec 3, 2020 06:00AM EST

December 03, 2020

- Achieved Record High Quarterly Revenues and Gross Profit- Maintained Stable and High Gross Margin- Attained Second Quarter of Adjusted Operating Profitability

GUANGZHOU, China, Dec. 03, 2020 (GLOBE NEWSWIRE) -- EHang Holdings Limited (EHang or the Company) (Nasdaq: EH), the worlds leading autonomous aerial vehicle (AAV) technology platform company, today announced its unaudited financial results for the third quarter ended September 30, 2020.

Third Quarter 2020 Highlights

Financial and Operational Highlights

-- Total revenues were RMB71.0 million (US$10.5 million), up 104.3% year over year, with growth across the main revenue streams. -- Gross margin was 59.2%, an increase of 4.3 percentage points year over year, driven by optimized cost structureof certain products and the change in revenue mix. Gross profit was RMB42.0 million (US$6.2 million), an increase of 120.3% year over year. -- Operating loss was RMB1.8 million (US$0.3 million), shrinking from an operating loss of RMB10.6 million in the third quarter of 2019. -- Adjusted operating profit1 (non-GAAP) was achieved again at RMB4.5 million (US$0.7 million), turning around from an adjusted operating loss of RMB7.4 million in the third quarter of 2019. -- Net loss was RMB1.1 million (US$0.2 million), narrrowing from net loss of RMB10.2 million in the third quarter of 2019. -- Adjusted net income2 (non-GAAP) was achieved again at RMB5.3 million (US$0.8 million), turning around from an adjusted net loss of RMB7.0 million in the third quarter of 2019. -- Sales of the EH216, the Companys flagship passenger-grade AAV, reached 23 units in the third quarter of 2020 versus 18 units in the third quarter of 2019. Of the 23 units, 2 were the newly launched EH216F.

Business Highlights

-- Launched the EH216F AAV and intelligent aerial firefighting solution: In July, EHang introduced the EH216F, the firefighting version of EH216. The EH216F is the worlds first large-payload AAV for high-rise aerial firefighting. With a peak altitude of up to 600 meters, it is superior to conventional extinguisher equipment for high-rise fires. Given significant market demand, it has attracted strong interest from emergency management departments and fire departments at national and local level in China. -- Unveiled the heavy-lift EH216L AAV for aerial logistics: In September, EHang unveiled another new product, the aerial logistics version of EH216 named the EH216L. The EH216L is a multi-rotor AAV with the record payload capacity. This model opens up more commercial opportunities for various urban and rural aerial logistics uses that require frequent and point-to-point deliveries. -- Capacity expansion to meet high demand for AAVs in China: In July, EHang announced that it will build a new AAV production facility in Yunfu, Guangdong. This factory expands upon the current facility in Guangzhou and will support the growth of the air mobility business in China with a planned initial capacity of 600 units of passenger-grade AAVs per annum. The Yunfu factory is designed to be an industry-leading AAV production center and will feature an R&D facility and a training center for air mobility. -- Obtained the first operational flight permit for passenger-grade AAVs in North America: In July, the EH216 was awarded a Special Flight Operations Certificate issued by the Transport Canada Civil Aviation with which trial flights have been permitted and are routinely conducted in Qubec province, Canada. -- Joined an international project to develop an air ambulance: In August 2020, EHang was selected to join Ambular, an important international project supported by the International Civil Aviation Organization, which is dedicated to the development of a flying ambulance for emergency medical uses.

Mr. Huazhi Hu, EHangs Founder, Chairman and Chief Executive Officer, commented: In the third quarter we had significant growth in revenues and gross profit, both year-over-year and quarter-over-quarter. Notably, we have attained positive quarterly operating profitability on an adjusted basis again since last time in the fourth quarter of 2019. This reflects our improving business operations despite the impact of COVID-19 around the world.

Hu continued, We are excited by the launch of two new products based on the cutting-edge EH216 passenger-grade AAV technology platform. The EH216F and the EH216L are designed to meet strong market demand for high-rise firefighting solutions and heavy-lift aerial logistics solutions. Both are expected to drive revenue growth in the years to come. With increasing demand and stronger government emphasis on supporting the development of urban air mobility and unmanned civil aviation in China, we have started to ramp up our production capacity with the new facility in Yunfu. This is an important step forward as we get ourselves ready for the next phase of growth.

We are confident in our long-term growth prospects. We are the recognized world leader in UAM. Further regulatory breakthroughs should drive faster growth of the global UAM market. We are creating new use cases, increasing our air mobility operations, and most importantly, providing compelling and integrated technologies and solutions. With the government support and relevant infrastructure upgrade, it is expected that we will receive the airworthiness certificate for EH216 in 2021 and start to provide commercial operation services, concluded Mr. Hu.

Third Quarter 2020 Financial Results

Total Revenues

Total revenues were RMB71.0 million (US$10.5 million), up 104.3% year over year, with growth across the main revenue streams. Air mobility solutions represented 49.0% of total revenues in the third quarter of 2020. Sales of the EH216, the Companys flagship passenger-grade AAV, reached 23 units, including 2 units of the EH216F, in the third quarter of 2020, compared with 18 units in the same period of 2019.

Costs of revenues

Costs of revenues were RMB29.0 million (US$4.3 million), up 84.8% year over year. The increase tracked growth in revenues.

Gross profit

Gross profit was RMB42.0 million (US$6.2 million), up 120.3% from RMB19.1 million in the third quarter of 2019.

Gross margin was 59.2%, up 4.3 percentage points from 54.9% in the third quarter of 2019. The steady increase in gross margin was mainly due to the optimization of cost structure of certain products and changes in revenue mix.

Operating expenses

Total operating expenses were RMB44.2 million (US$6.5 million), up 47.3% from RMB30.0 million in the third quarter of 2019. Operating expenses as a percentage of total revenues were 62.2%, 24.1 percentage points lower when compared with 86.3% in the third quarter of 2019. The increase in operating expenses were primarily due to higher research and development expenses related to continuous product development and increased general and administrative expenses.

-- Sales and marketing expenses were RMB8.4 million (US$1.2 million), up 35.4% from RMB6.2 million in the third quarter of 2019, as we expanded operations in European markets. -- General and administration expenses were RMB16.0 million (US$2.4 million), up 65.5% from RMB9.7 million in the third quarter of 2019. The increase was mainly due to the additional expenses related to being a public company and prudent provisions related to potential COVID-19 impacts. -- Research and development expenses were RMB19.8 million (US$2.9 million), up 40.0% from RMB14.1 million in the third quarter of 2019. The increase was mainly due to continued investment in new model development. The Company had been preparing new versions of both passenger-grade AAV and non-passenger-grade AAV models, such as the newly-announced EH216F and EH216L as well as related operating systems with enhanced functionalities.

Adjusted operating expenses3 (non-GAAP)

Adjusted operating expenses were RMB37.9 million (US$5.6 million), representing an increase of 41.2% from RMB26.8 million in the third quarter of 2019. Adjusted operating expenses as a percentage of total revenues were 53.4%, compared with 77.3% in the third quarter of 2019.

Operating loss

Operating loss was RMB1.8 million (US$0.3 million), compared with operating loss of RMB10.6 million in the third quarter of 2019. Operating margin was negative 2.6%, compared with negative 30.5% in the third quarter of 2019.

Adjusted operating profit/(loss) (non-GAAP)

Adjusted operating profit was achieved again with RMB4.5 million (US$0.7 million) compared with adjusted operating loss of RMB7.4 million in the third quarter of 2019. Adjusted operating margin was 6.4%, compared to negative 21.2% in the third quarter of 2019.

Net loss

Net loss was RMB1.1 million (US$0.2 million) compared with net loss of RMB10.2 million in the third quarter of 2019. Net margin was negative 1.5%, compared with negative 29.4% in the third quarter of 2019.

Adjusted net income/(loss) (non-GAAP)

Adjusted net income was achieved again with RMB5.3 million (US$0.8 million) compared with adjusted net loss of RMB7.0 million in the third quarter of 2019. Adjusted net margin was 7.4%, compared to negative 20.1% in the third quarter of 2019.

Adjusted net income attributable to EHangs ordinary shareholders was RMB6.1 million (US$0.9 million) with an adjusted net margin of 8.6%, compared to negative 20.7% in the third quarter of 2019.

Earnings/(loss) per share and per ADS

Basic and diluted net loss per ordinary share were both RMB0.002 (US$0.0004). Adjusted basic and diluted earnings per ordinary share4 (non-GAAP) were both RMB0.06 (US$0.01).

Basic and diluted net loss per ADS were both RMB0.004 (US$0.0008). Adjusted basic and diluted earnings per ADS5 (non-GAAP) were both RMB0.12 (US$0.02).

Business Outlook

Due to continuous uncertainties surrounding the impacts and duration of COVID-19 in China and international markets, the Company is adjusting its outlook to at least 50% annual revenues growth for full year 2020. However, the Company has become more optimistic and confident in its long-term growth outlook given the increasing practical uses and demands for AAVs and stronger government emphasis on supporting the industry growth in the global UAM markets, especially in China.

The above outlook is based on information available and market conditions as of the date of this press release and reflects the Companys current and preliminary expectations, which are subject to change.

Conference Call

EHangs management team will host an earnings conference call at 8:00 AM on Thursday, December 3, 2020, U.S. Eastern Time (9:00 PM on December 3, 2020, Beijing/Hong Kong Time).

To join the conference, please register in advance using the link below. Conference access information will be provided upon registration.

Participant Online Registration: http://apac.directeventreg.com/registration/event/8538989

A replay of the conference call may be accessed by phone at the following numbers until December 11, 2020. To access the replay, please reference the conference ID 8538989.

Phone NumberInternational +61 2 8199-0299United States +1 (646) 254-3697Hong Kong +852 800963117Mainland China +86 4006322162 +86 8008700205

A live and archived webcast of the conference call will be available on the Companys investor relations website at http://ir.ehang.com/.

About EHang

EHang (Nasdaq: EH) is the world's leading autonomous aerial vehicle (AAV) technology platform company. EHangs mission is to make safe, autonomous, and eco-friendly air mobility accessible to everyone. EHang provides customers in various industries with AAV products and commercial solutions: air mobility (including passenger transportation and logistics), smart city management, and aerial media solutions. As the forerunner of cutting-edge AAV technologies and commercial solutions in the global Urban Air Mobility (UAM) industry, EHang continues to explore the boundaries of the sky to make flying technologies benefit our life in smart cities. For more information, please visit www.ehang.com.

Safe Harbor Statement

This press release contains statements that may constitute forward-looking statements pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as will, expects, anticipates, aims, future, intends, plans, believes, estimates, likely to and similar statements. Management has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While they believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond management's control. These statements involve risks and uncertainties that may cause EHang's actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements.

Non-GAAPFinancial Measures

The Company uses adjusted operating profit/(loss), adjusted net income/(loss), adjusted operating expenses, adjusted basic and diluted earnings/(loss) per ordinary share and adjusted basic and diluted earnings/(loss) per ADSs (the Non-GAAP Financial Measures) in evaluating its operating results and for financial and operational decision-making purposes. There was no income tax impact on the Companys non-GAAP adjustments because the non-GAAP adjustments are usually recorded in entities located in tax-free jurisdictions, such as the Cayman Islands.

The Company believes that the Non-GAAP Financial Measures help identify underlying trends in its business that could otherwise be distorted by the effects of items such as share-based compensation expenses that are included in their comparable GAAP measures. The Company believes that the Non-GAAP Financial Measures provide useful information about its operating results, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by its management members in their financial and operational decision-making.

Each of the Non-GAAP Financial Measures should not be considered in isolation or construed as an alternative to its comparable GAAP measure, operating margin and net margin or any other measure of performance or as an indicator of the Companys operating performance. Investors are encouraged to review the Companys most directly comparable GAAP measures in conjunction with the Non-GAAP Financial Measures. The Non-GAAP Financial Measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Companys data. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.

Exchange Rate

This press release contains translations of certain RMB amounts into U.S. dollars (USD) at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of RMB6.7896 to US$1.00, the noon buying rate in effect on September 30, 2020 in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred to could be converted into USD or RMB, as the case may be, at any particular rate or at all.

Statement Regarding Preliminary Unaudited Financial Information

The unaudited financial information set out in this earnings release is preliminary and subject to potential adjustments. Adjustments to the consolidated financial statements may be identified when audit work has been performed for the Companys year-end audit, which could result in significant differences from this preliminary unaudited financial information.

Investor Contact:ir@ehang.com

In the U.S.:Julia@blueshirtgroup.com In China:Susie@blueshirtgroup.com

Media Contact:pr@ehang.com

EHANG HOLDINGS LIMITEDCONDENSED CONSOLIDATED BALANCE SHEETS(Amounts in thousands of Renminbi (?RMB?) and US dollars (?US$?)) As of As of December September 31, 2019 30, 2020 RMB RMB US$ (Unaudited) (Unaudited)ASSETS Current assets: Cash and cash equivalents 321,662 157,804 23,242Short-term investments 7,674 84,696 12,474Accounts receivable, net 41,103 137,253 20,215Unbilled revenue 4,807 2,800 412Cost and estimated earnings in excess of 14,212 3,722 548billingsInventories 18,490 56,690 8,350Prepayments and other current assets 20,565 22,450 3,307Total current assets 428,513 465,415 68,548 Non-current assets: Property and equipment, net 16,272 12,266 1,807Intangible assets, net 1,209 1,108 163Long-term loans receivable - 14,835 2,185Long-term investments 2,983 2,919 430Deferred tax assets 184 184 27Other non-current assets 252 187 28Total non-current assets 20,900 31,499 4,640 Total assets 449,413 496,914 73,188 LIABILITIES AND SHAREHOLDERS? EQUITY Current liabilities Short-term bank loans 5,000 15,000 2,209Accounts payable 27,285 52,487 7,730Contract liabilities 9,918 6,506 958Accrued expenses and other liabilities 53,310 77,516 11,418Deferred income - 783 115Deferred government subsidies 80 80 12Income taxes payable 5 - -Total current liabilities 95,598 152,372 22,442 Non-current liabilities: Long-term loans 32,534 - -Mandatorily redeemable non-controlling - 40,000 5,891interestsDeferred tax liabilities 292 292 43Unrecognized tax benefit 5,494 5,314 783Deferred income - 3,297 486Deferred government subsidies 140 80 12Total non-current liabilities 38,460 48,983 7,215 Total liabilities 134,058 201,355 29,657

EHANG HOLDINGS LIMITEDCONDENSED CONSOLIDATED BALANCE SHEETS (CONT?D)(Amounts in thousands of Renminbi (?RMB?) and US dollars (?US$?)) As of As of December September 31, 2019 30, 2020 RMB RMB US$ (Unaudited) (Unaudited)LIABILITIES AND SHAREHOLDERS? EQUITY (CONTINUED)Shareholders? equity: Class A ordinary shares 44 44 6 Class B ordinary shares 28 28 5 Additional paid-in capital 1,020,691 1,042,728 153,577 Statutory reserves 1,035 1,035 152 Accumulated deficit (720,419 ) (758,852 ) (111,767 )Accumulated other comprehensive income 10,195 7,537 1,110 Total EHang Holdings Limited 311,574 292,520 43,083 shareholders? equityNon-controlling interests 3,781 3,039 448 Total shareholders? equity 315,355 295,559 43,531 Total liabilities and shareholders? 449,413 496,914 73,188 equity

EHANG HOLDINGS LIMITEDCONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS(Amounts in thousands of Renminbi (?RMB?) and US dollars (?USD?) except fornumber of shares and per share data)

Three Months Ended Nine Months Ended September June 30, September 30, September September 30, 30, 2020 2020 30, 2020 2019 2019 RMB RMB RMB US$ RMB RMB US$ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)Total revenues 34,745 35,700 70,980 10,454 67,130 125,498 18,484 Costs of (15,674 ) (15,147 ) (28,958 ) (4,265 ) (29,108 ) (51,769 ) (7,625 )revenuesGross profit 19,071 20,553 42,022 6,189 38,022 73,729 10,859 Operating expenses:Sales andmarketing (6,162 ) (9,218 ) (8,344 ) (1,229 ) (18,698 ) (23,338 ) (3,437 )expensesGeneral andadministrative (9,692 ) (16,348 ) (16,044 ) (2,363 ) (27,584 ) (43,000 ) (6,333 )expensesResearch anddevelopment (14,123 ) (17,870 ) (19,777 ) (2,913 ) (41,699 ) (54,307 ) (7,999 )expensesTotaloperating (29,977 ) (43,436 ) (44,165 ) (6,505 ) (87,981 ) (120,645 ) (17,769 )expenses Otheroperating 326 3,724 333 49 1,469 4,826 711 incomeOperating loss (10,580 ) (19,159 ) (1,810 ) (267 ) (48,490 ) (42,090 ) (6,199 ) Other income/ (expense):Interest 150 974 738 109 646 3,124 460 incomeInterest (110 ) (488 ) (669 ) (99 ) (409 ) (1,645 ) (242 )expensesForeignexchange gain/ 360 278 (233 ) (34 ) 396 (226 ) (33 )(loss)Other income 88 244 678 100 241 1,003 148 Other expense - (1,689 ) (56 ) (8 ) (26 ) (1,745 ) (257 )Total otherincome/ 488 (681 ) 458 68 848 511 76 (expense) Loss beforeincome tax and(loss)/gain (10,092 ) (19,840 ) (1,352 ) (199 ) (47,642 ) (41,579 ) (6,123 )from equitymethodinvestmentIncome tax(expenses)/ (49 ) 145 - - (127 ) 145 21 benefitsLoss before(loss)/gainfrom equity (10,141 ) (19,695 ) (1,352 ) (199 ) (47,769 ) (41,434 ) (6,102 )methodinvestment(Loss)/gainfrom equity (59 ) (33 ) 288 42 (69 ) 236 35 methodinvestmentNet loss (10,200 ) (19,728 ) (1,064 ) (157 ) (47,838 ) (41,198 ) (6,067 )

EHANG HOLDINGS LIMITEDCONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (CONT?D)(Amounts in thousands of Renminbi (?RMB?) and US dollars (?USD?) except fornumber of shares and per share data)

Three Months Ended Nine Months Ended September June 30, September 30, September September 30, 30, 2020 2020 30, 2020 2019 2019 RMB RMB RMB US$ RMB RMB US$ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)Net loss (10,200 ) (19,728 ) (1,064 ) (157 ) (47,838 ) (41,198 ) (6,067 )Net (income)/lossattributable to (192 ) 1,111 798 118 1,226 2,765 407 non-controllinginterestsNet lossattributable to (10,392 ) (18,617 ) (266 ) (39 ) (46,612 ) (38,433 ) (5,660 )EHang HoldingsLimitedAccretion toredemptionvalue ofredeemable (10,660 ) - - - (13,694 ) - - convertiblepreferredsharesNet lossattributable to (21,052 ) (18,617 ) (266 ) (39 ) (60,306 ) (38,433 ) (5,660 )ordinaryshareholdersNet loss per ordinary share: Basic and (0.35 ) (1.04 ) dilutedNet loss perClassA and ClassBordinary share:Basic and (0.17 ) (0.002 ) (0.0004 ) (0.35 ) (0.05 )dilutedShares used innet loss perordinary share computation (in thousands ofshares):Basic and 59,582 57,732 dilutedShares used innet loss perClass A andClass B ordinary sharecomputation (inthousands ofshares):Basic 109,548 109,608 109,608 109,541 109,541 Diluted 109,548 109,950 109,950 109,541 109,541 Loss per ADS (2ordinary sharesequal to 1 ADS) (0.34 ) (0.004 ) (0.0008 ) (0.70 ) (0.10 )Basic andDiluted

EHANG HOLDINGS LIMITEDCONDENSED RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS(Amounts in thousands of Renminbi (?RMB?) and US dollars (?US$?) except fornumber of shares and per share data)

Three Months Ended Nine Months Ended September June 30, September 30, September September 30, 30, 2020 2020 30, 2020 2019 2019 RMB RMB RMB US$ RMB RMB US$ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)Gross profit 19,071 20,553 42,022 6,189 38,022 73,729 10,859 Plus:Share-based 71 - 80 12 365 80 12 compensationAdjusted 19,142 20,553 42,102 6,201 38,387 73,809 10,871 gross profitAdjusted 55.1 % 57.6 % 59.3 % 59.3 % 57.2 % 58.8 % 58.8 %gross margin Operating (29,977 ) (43,436 ) (44,165 ) (6,505 ) (87,981 ) (120,645 ) (17,769 )expensesPlus:Share-based 3,132 8,012 6,258 921 12,750 16,206 2,387 compensationAdjustedoperating (26,845 ) (35,424 ) (37,907 ) (5,584 ) (75,231 ) (104,439 ) (15,382 )expensesAdjustedoperating 77.3 % 99.2 % 53.4 % 53.4 % 112.1 % 83.2 % 83.2 %expensespercentage Operating (10,580 ) (19,159 ) (1,810 ) (267 ) (48,490 ) (42,090 ) (6,199 )lossPlus:Share-based 3,203 8,012 6,338 933 13,115 16,286 2,399 compensationAdjustedoperating (7,377 ) (11,147 ) 4,528 666 (35,375 ) (25,804 ) (3,800 )(loss)/profitAdjustedoperating (21.2 %) (31.2 %) 6.4 % 6.4 % (52.7 %) (20.6 %) (20.6 %)margin Net loss (10,200 ) (19,728 ) (1,064 ) (157 ) (47,838 ) (41,198 ) (6,067 )Plus:Share-based 3,203 8,012 6,338 933 13,115 16,286 2,399 compensationAdjusted net(loss)/ (6,997 ) (11,716 ) 5,274 776 (34,723 ) (24,912 ) (3,668 )incomeAdjusted net (20.1 %) (32.8 %) 7.4 % 7.4 % (51.7 %) (19.9 %) (19.9 %)margin

EHANG HOLDINGS LIMITEDCONDENSED RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS (CONT?D)(Amounts in thousands of Renminbi (?RMB?) and US dollars (?US$?) except fornumber of shares and per share data)

Three Months Ended Nine Months Ended September June 30, September 30, September September 30, 30, 2020 2020 30, 2020 2019 2019 RMB RMB RMB US$ RMB RMB US$ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)Net lossattributable (21,052 ) (18,617 ) (266 ) (39 ) (60,306 ) (38,433 ) (5,660 )to ordinaryshareholdersPlus:Share-based 3,203 8,012 6,338 933 13,115 16,286 2,399 compensationPlus:Accretion toredemptionvalue of 10,660 - - - 13,694 - - redeemableconvertiblepreferredsharesAdjusted net(loss)/income (7,189 ) (10,605 ) 6,072 894 (33,497 ) (22,147 ) (3,261 )attributableto ordinaryshareholdersAdjusted netincomeattributable (20.7 %) (29.7 %) 8.6 % 8.6 % (49.9 %) (17.6 %) (17.6 %)to ordinaryshareholdersmargin Adjustedbasic anddiluted net (0.12 ) (0.58 ) loss perordinaryshareAdjustedbasic anddiluted net(loss)/income per (0.10 ) 0.06 0.01 (0.20 ) (0.03 )Class A andClass BordinaryshareAdjustedbasic anddiluted net (0.20 ) 0.12 0.02 (0.40 ) (0.06 )(loss)/income perADS

EHANG HOLDINGS LIMITEDCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Amounts in thousands of Renminbi (?RMB?) and US dollars (?USD?))

Three Months Ended Nine Months Ended September June 30, September 30, September September 30, 30, 2020 2020 30, 2020 2019 2019 RMB RMB RMB US$ RMB RMB US$ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)CASH FLOWSFROM OPERATINGACTIVITIESNet loss (10,200 ) (19,728 ) (1,064 ) (157 ) (47,838 ) (41,198 ) (6,067 )Adjustmentsto reconcilenet loss tonet cash used inoperatingactivities:Depreciationand 1,388 1,620 1,550 228 4,185 4,740 698 AmortizationShare-based 3,203 8,012 6,338 933 13,115 16,286 2,399 compensationLoss ondisposal of - - 77 11 - 77 11 intangibleassetsLoss ondisposal of - 228 - - - 228 34 property andequipmentGain ondisposal of - - (288 ) (42 ) - (288 ) (42 )long-terminvestmentShare of netloss from an 59 33 - - 69 52 8 equityinvestee(Reversal)allowance (7 ) 3,727 4,650 685 (217 ) 8,519 1,255 for doubtfulaccounts Changes inoperating assets andliabilities:Accounts (23,658 ) (30,900 ) (65,317 ) (9,619 ) (34,166 ) (105,308 ) (15,510 )receivableUnbilled - - - - - 1,481 218 revenueCost andestimatedearnings in - - - - 3,247 10,490 1,545 excess ofbillingsInventories (6,942 ) (18,868 ) (8,844 ) (1,303 ) (11,746 ) (38,865 ) (5,724 )Prepaymentsand other (4,579 ) 1,388 (2,422 ) (357 ) (6,629 ) (2,795 ) (412 )currentassetsOthernon-current 15 21 22 3 44 65 10 assetsAccounts 4,727 11,446 11,809 1,740 7,195 25,951 3,822 payableContract 618 (170 ) 101 15 (3,674 ) (3,412 ) (503 )liabilitiesIncome taxes 49 - - - 49 (5 ) (1 )payableDeferred - - 4,080 601 - 4,080 601 incomeDeferredgovernment (20 ) (20 ) (20 ) (3 ) (60 ) (60 ) (9 )subsidiesUnrecognized - (151 ) - - - (180 ) (26 )tax benefitsAccruedexpenses and 4,989 (1,387 ) 7,370 1,085 6,177 4,380 645 otherliabilitiesNet cashused in (30,358 ) (44,749 ) (41,958 ) (6,180 ) (70,249 ) (115,762 ) (17,048 )operatingactivities

EHANG HOLDINGS LIMITEDCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT?D)(Amounts in thousands of Renminbi (?RMB?) and US dollars (?USD?))

Three Months Ended Nine Months Ended September June 30, September 30, September September 30, 30, 2020 2020 30, 2020 2019 2019 RMB RMB RMB US$ RMB RMB US$ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)CASH FLOWSFROM INVESTINGACTIVITIESPurchase ofproperty (147 ) (866 ) (170 ) (25 ) (1,009 ) (1,328 ) (196 )andequipmentDisposal ofproperty - 192 - - - 192 28 andequipmentAcquisitionof (180 ) (269 ) - - (180 ) (278 ) (41 )intangibleassetsProceedsfrommaturity of 25,130 2,500 20,900 3,078 39,530 36,400 5,361 short-terminvestmentsPurchase ofshort-term (34,730 ) (19,899 ) (76,265 ) (11,233 ) (57,630 ) (113,364 ) (16,697 )investmentsLoans tothird - - - - - (53,900 ) (7,939 )partiesRepaymentof loan - - 30,000 4,419 - 40,000 5,891 from athird partyLoan to arelated - - - - (425 ) - - partyRepaymentof loanfrom a - - - - 425 - - relatedpartyOthers - - - - - (54 ) (8 )Net cashflow usedin (9,927 ) (18,342 ) (25,535 ) (3,761 ) (19,289 ) (92,332 ) (13,601 )investingactivities

EHANG HOLDINGS LIMITEDCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT?D)(Amounts in thousands of Renminbi (?RMB?) and US dollars (?USD?))

Three Months Ended Nine Months Ended September June 30, September 30, September September 30, 30, 2020 2020 30, 2020 2019 2019 RMB RMB RMB US$ RMB RMB US$ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)CASH FLOWS FROMFINANCING ACTIVITIESProceeds fromshort-term bank - 5,000 5,000 736 5,000 15,000 2,209 loansRepayment of ashort-term bank - - - - (5,000 ) (5,000 ) (736 )loanProceeds from aloan from a 30,000 - - - 30,000 - - third partyRepayment ofloans from (5,000 ) - - - (5,000 ) - - third partiesShares issuedupon vesting of 3 - - - 3 - - restrictedshare unitsProceeds fromissuance ofmandatorilyredeemable - 40,000 - - - 40,000 5,891 non-controllinginterests of asubsidiaryProceeds fromissuance ofsubsidiaries?equity to - 2,023 - - - 2,023 298 non-controllinginterestholdersProceeds fromissuance ofClass Aordinary sharespursuant to - - - - - 7,313 1,077 underwriters?exercise ofover-allotmentoptionProceeds fromissuance ofSeries Credeemable - - - - 47,436 - - convertiblepreferredsharesPayment ofissuance ofClass Aordinary sharespursuant to - - (199 ) (29 ) - (715 ) (105 )underwriters?exercise ofover-allotmentoption?sissuance costsPayment ofissuance costs - (304 ) (2,408 ) (355 ) - (11,831 ) (1,743 )for initialpublic offeringNet cashprovided by 25,003 46,719 2,393 352 72,439 46,790 6,891 financingactivities

EHANG HOLDINGS LIMITEDCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT?D)(Amounts in thousands of Renminbi (?RMB?) and US dollars (?USD?))

Three Months Ended Nine Months Ended September June 30, September 30, September September 30, 30, 2020 2020 30, 2020 2019 2019 RMB RMB RMB US$ RMB RMB US$ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) Effect ofexchangeratechanges on 1,501 (454 ) (5,285 ) (778 ) 1,952 (2,554 ) (376 )cash andcashequivalentsNetdecrease incash and (13,781 ) (16,826 ) (70,385 ) (10,367 ) (15,147 ) (163,858 ) (24,134 )cashequivalentsCash andcashequivalentsat the 60,153 245,015 228,189 33,609 61,519 321,662 47,376 beginningof theperiod/yearCash andcashequivalents 46,372 228,189 157,804 23,242 46,372 157,804 23,242 at the endof theperiod

Unpaid issuance cost for Series Credeemable convertible preferred 743 743 743 109 743 743 109shares included in Accrued expensesand other liabilitiesUnpaid issuance costs for initialpublic offering included in Accrued - 5,304 2,896 427 - 2,896 427expenses and other liabilitiesUnpaid issuance costs for issuance ofClass A ordinary shares pursuant tounderwriters? exercise of - 1,046 847 125 - 847 125over-allotment option included inAccrued expenses and otherliabilities

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1 Adjusted operating profit/(loss) is a non-GAAP financial measure, which is defined as operating loss excluding share-based compensation expenses. See Non-GAAP Financial Measures at the end of this press release.2 Adjusted net income/(loss) is a non-GAAP financial measure, which is defined as net loss excluding share-based compensation expenses. See Non-GAAP Financial Measures at the end of this press release.3 Adjusted operating expenses is a non-GAAP financial measure, which is defined as operating expenses excluding share-based compensation expenses. See Non-GAAP Financial Measures at the end of this press release.4 Adjusted basic and diluted earnings per ordinary share is a non-GAAP financial measure, which is defined as basic and diluted net loss per ordinary share excluding share-based compensation expenses and accretion to redemption value of redeemable convertible preferred shares. See Non-GAAP Financial Measures at the end of this press release.5 Adjusted basic and diluted earnings per ADS is a non-GAAP financial measure, which is defined as basic and diluted net loss per ADS excluding share-based compensation expenses and accretion to redemption value of redeemable convertible preferred shares. See Non-GAAP Financial Measures at the end of this press release.